Heritage Foundation Gives US Lowest-Ever Economic Freedom Score

The Heritage Foundation logo is pictured at a discussion in Washington, D.C., in a file photo. (Mandel Ngan/AFP/Getty Images)

The United States has fallen to its lowest-ever ranking in the annual Economic Freedom Index, published by The Heritage Foundation, as the country struggles to rein in debt and budget deficits.

Overall, the world economy remains “moderately free,” according to the 2022 report (pdf), but the situation in the United States is worrying: “Quite notable is the continuing decline in the ‘mostly free’ category of the United States, which plummeted to 25th place, its lowest ranking ever in the 28-year history of the Index. The major causative factor in the erosion of America’s economic freedom is excessive government spending, which has resulted in mounting deficit and debt burdens.”

The United States fell 2.7 points from 2021 and currently has a score of 72.1. Among the 32 countries in the Americas region, the United States is ranked third, lower than Canada, which has a score of 76.6, and Chile, which scored 74.4 points. Since 2017, the United States has lost 3 points overall, largely due to a sharp decrease in the fiscal health score.

Among the 12 metrics calculated in the report, the United States scored the highest in property rights, with 95.7 points. In business freedom, monetary freedom, investment freedom, and financial freedom, the United States scored 80 points or higher.

In judicial effectiveness, government integrity, tax burden, labor freedom, and trade freedom, Washington scored in the 70s. In government spending, the country only netted 54.5 points, while in fiscal health, the score was dropped to zero.

The country is currently dealing with inflation, which is at a 40-year high. Consumer Price Index (CPI) rose by 7.5 percent in January compared to the same month in 2021. The Michigan consumer sentiment index fell to an 11-year low in February.

The national debt has broken through the $30 trillion level. Though business freedom and rule of law are strong, The Heritage Foundation notes that the U.S. economy is being “crushed by reckless government overspending.”

“For Americans like me who have benefitted from the legacy of a society justly called the ‘land of the free,’ this year’s Index of Economic Freedom paints a disturbing picture. The startling decline of America’s economic freedom is serious cause for alarm,” Kevin Roberts, president of The Heritage Foundation, wrote in the report’s preface (pdf).

“Policymakers in Washington, DC, and around the globe must understand that simply spending their way back to prosperity always has failed and will continue to fail.”

In 2021, the country rebounded from the economic crunch triggered by the COVID-19 lockdowns. “Unchecked deficit spending” and “unprecedentedly accommodative” monetary policies continued. Since the 2020 presidential election, racial tensions and “bitter political polarization” have aggravated, the foundation stated.

The foundation blamed President Joe Biden for pursuing a “radical left agenda.” With 782,522 pandemic deaths as of Dec. 1, 2021, the administration’s COVID-19 response was ranked 58th in the index.